Private equity owners replace Fitness First management team

Amy King
03 February 2012

Tweet
Facebook
LinkedIn
Google plus
Send to

BC Partners has axed the Fitness First core management team in a bid to prevent the company sinking under its high-interest loans, according to reports.

BC Partners has appointed Chris Stone as chief executive following his successful turnaround of private equity-backed Northgate Information Solutions. The gym chain's chief financial officer and head of the UK have also been replaced.

The new appointments follow BC Partners' replacement of partner Stefano Quadrio Curzio as chairman of the Fitness First board by managing partner Andrew Newington.

In 2005 BC Partners acquired the gym chain for £835m. The latest move aims to protect its £300m equity investment in the company, which is now said to have high-interest borrowings of £550m.

The private equity house is due to commence talks with the company's creditors next month to discuss the refinancing of its debt load, which some industry professionals consider unsustainable. Much of the debt matures at the end of next year. However the crucial revolving debt facility is set to expire in November.

The new appointments are expected to reduce the number of managers in the roughly 430 Fitness First clubs across 15 countries and cut spending. Reinvestment in the branches is also expected in order to improve service.